Vista Energy S.A.B. de C.V.

Hello everyone, and welcome to the VISTA's second quarter 2025 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To participate, you will need to press star 1-1 on your telephone. You will then hear a message advising your hand is raised. To withdraw your question, simply press star 1-1 again. Please note, This event is being recorded. Now it's my pleasure to turn the call over to VISTA's Strategic Planning and IRO, Alejandro Chernakov. Please proceed.

Thanks. Good morning, everyone. We are happy to welcome you to VISTA's second quarter of 2025 results conference call. I am here with Miguel Galucho, VISTA's Chairman and CEO, Pablo Verapinto, VISTA's CFO, Juan Garobi, VISTA's CTO, and Matias Weisel, VISTA's COO. Before we begin, I would like to draw your attention to our cautionary statement on slide two. Please be advised that our remarks today, including the answers to your questions, may include forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from the expectations contemplated by these remarks. Our financial figures are stated in U.S. dollars and in accordance with International Financial Reporting Standards, IFRS. However, during this conference call, we may discuss certain non-IFRS financial measures, such as adjusted EBITDA. Reconciliations of these measures to the closest IFRS measures can be found in the earnings release that we issued yesterday. Please check our website for further information. Our company is Sociedad Anónima Bursátil de Capital Variable, organized under the laws of Mexico, registered in the Bolsa Mexicana de Valores and the New York Stock Exchange. Our tickers are Vista in the Bolsa Mexicana de Valores and BIST in the New York Stock Exchange. As explained in our earnings release yesterday afternoon, please be advised that the operating and financial metrics shown in this presentation reflect the effects of consolidating the acquisition of Petronas Argentina as of April 1st, 2025. Finally, note that as of this webcast, we have moved all definitions which were previously at the bottom of each slide to an appendix at the end of the presentation. I will now tell the corner over to Miguel.

Thanks, Ale. Good morning, everyone, and welcome to this earning call. Q2 2025 was transformational for our company as we completed the acquisition of 50% stake in La Marga Chica, the second largest oil production block in Vaca Muerta. This transaction has turned Vista into a significantly larger company. Boosted by this acquisition, Q2 total production was 118,000 VOEs per day, an increase of 81% year-over-year. Oil production was 102,000 barrels per day, 79% year-over-year. Vista is now the largest independent oil producer and the largest oil exporter in Argentina. Total revenues during the quarter were $611 million, 54% above the same quarter of last year. Lifting cost was $4.7 per VOE, 4% above year over year. Capital expenditure was $356 million, driven by the ramp up in new well activity during the quarter, both in Vista operated block and in La Marga Chica. Adjusted EVDA was $405 million, an inter-annual increase of 40%. Net income was $235 million, including $102 million related to one-off, mainly related to the Petronas Argentina acquisition. Earnings per share were $2.3. Free cash flow outflow in this quarter was $1.4 billion, mostly reflected just from cash payment of the Petronas Argentina acquisition. Finally, net leverage ratio at the quarter end was 1.38 times on a pro-forma basis, reflecting the new debt raise to finance this cash payment. During Q2, we made solid progress on the operational front. We will actively pick up sequentially with 24 wells connected during the quarter, eight in Baja del Palo Este, four in Baja del Palo Este, and 12 corresponding to our 50% working interest in La Marga Chica. We continue to see the result of our strong focus on cost efficiency. We made decisive progress in reducing new world costs, capturing savings through innovation and efficiency, changes to our contract strategy, and contract renegotiations for specific consumables and services. This has led to a new drilling and completion cost of $12.8 million per well, representing a saving of $1.4 million per well, or 10%, which will be reflected in our cost of a new well starting in Q3 2025. Following the inauguration of Old Elval's duplicated pipeline in March, we eliminated old tracking as of April 1. to a $41 million saving compared to Q4 2024, substantially improving our margins. Total production was 118,000 VOEs per day, a sequential increase of 46% and inter-annual increase of 81%. This reflects the solid execution of our new well campaign as we connected 47 new wells in the last 12 months and the consolidation of La Marga Chica production as of April 1st. Oil production was 102.2 thousand barrels of oil per day, 79% above year-over-year and 47% above Q1. Gas production increased 93% on an inter-annual basis and 44% on a sequential basis. In Q2 2025, total revenues were $611 million, 50% higher year-over-year, driven by the strong increase in oil production, which more than offset lower oil prices. Oil exports tripled year-over-year to 5.6 million barrels for the quarter, boosted by the production growth and acquisition of La Marga Chica. Realized oil price was 62.2 dollars per barrel on average, down 13% on interannual basis, mainly driven by the lower international prices. During Q2, 100% of all volumes sold were at export parity prices. Lifting cost during Q2 was $4.7 per VOE, sequentially flat, reflecting our continued focus on cost control. Selling expenses per VOE came down 41% quarter-over-quarter, reflecting the elimination of oil tracking as of April 1st. This led to a saving of $28 million vis-a-vis Q1 and $41 million vis-a-vis Q4 2024, the quarter during which tracking volumes peaked. Adjusted EVDA during the quarter was $405 million, 40% higher on an inter-annual basis, driven by the production increase in our operating blocks and the consolidation of 50% working interest in La Marga Chica. On a sequential basis, adjusted EVDA margin increased 4% match points, and net back remained flat as the elimination of oil tracking offset lower oil prices. During Q2 2025, cash flow from operating activities was minus $9 million. reflecting in-contact payment of $250 million, a $59 million increase in working capital, and payments for maintenance pensions of $18 million. Cash flow used in investing activities was $1,347 million, reflecting accrued capex of $356 million, an increase of $140 million in working capital, and the acquisition of Petronas Argentina for $842 million net. The free cash outflow during the quarter was $1.4 billion, mostly reflecting the upfront payment of Petronas Argentina. Cash flow from financing activities was $770 million, reflecting the proceeds from borrowing of $1,379 million, and partially offset by the repayment of borrowings of $514 million. After quarter end, we have signed three term loans with local and international banks for a total of $500 million to cancel all outstanding maturities in the second half of 2025 and early 2026. Finally, cash at period end was $154 million Net leverage ratio on a pro-format basis reflecting the Petronas transaction stood at 1.38 times adjusted EBITDA. Our updated annual guidance reflects that, following the acquisition of La Marga Chica, we have emerged as a company with larger scale and stronger cash flow generation. Total production in 2025 is forecast between 112,000 and 114,000 BOEs per day. based on the planned well tie-ins, we forecast between 125 and 128,000 BOEs per day for the second semester, which leaves us with well positioned for a greater start in 2026. Assisted EVA is forecast between $1.5 and $1.6 billion for the year, assuming $65 brand for the second semester, equivalent to $60 per bar of real life price A change in $5 per barrel of realized oil price in the second half of the year results in a change in adjusted EVDA of $80 million. During the second semester, we forecast $825 to $925 million of adjusted EVDA or $1.65 to $1.85 billion on analyzed run-ride basis. To deliver this plan, we forecast to connect 59 new wells during the year, of which 34 were connected in the first semester, combining our operating block with our working interest in La Marga Chica. CAPEC in this plan is forecast at $1.2 billion for the year. This reflects our new drilling and completion cost. and $60 million of savings in facilities compared to the original 2025 guidance. Our new 2025 plan represents an improvement to the original plan. At $60 realized price, we are forecasting a neutral free cash flow during the second half of the year, composed of negative free cash flow in Q3 and positive free cash flow in Q4. evidencing a strong capital discipline in the context of high oil price volatility. Compared to the original guidance for the year, we are now forecasting to deliver 16% more production and 70% more adjusted EBITDA at $65 rent while maintaining the same capex level. The projected growth for 2025 compared to 2024 is 62% for production and 41% for adjusted EBITDA. To conclude this call, and before we move to Q&A, I would like to make some closing remarks. This has been a transformational quarter for Vista. The acquisition of 50% working interest in La Marga Chica materially boosted production and adjusted EVDA. Our company has emerged as the largest independent oil producer and the largest oil exporting in Argentina. On the operational front, we significantly reduced selling expenses by eliminating old tracking, which expanded adjusted EBITDA margin, even though prices dropped during the quarter. We have made change to our DMC contracting model, capturing savings through innovation and renegotiating rates with service providers, leading to a 10% lower world cost, capturing significant value through a highly competitive development cost. Finally, the revised annual guidance following the acquisition of La Marga Chica implies material production and adjusted FDA growth while significantly improving our free cash flow profile. Before we move to Q&A, I would like to thank everyone at VISTA for their outstanding work this quarter. Operators, we can now move to Q&A.